Ads offer snapshot of health care act’s approach

November 20, 2013

Two televised commercials for insurance companies are instructive when compared to aspects of the Affordable Care Act.

One ad uses mythical, reckless creatures dubbed "rate suckers" to illustrate the impact accident-prone people can have on insurance rates. These vampiric folks (in a twist on the metaphor) inflate insurance rates for safe drivers.

The commercial proffers a tracking device drivers can deploy to prove they drive safely and deserve lower rates than parasitic members of the risk pool.

The other commercial is aimed at the opposite end of the spectrum. Another company offers to keeps high-risk drivers legal for less. That insurer touts policies with state-minimum coverage as being more affordable.

Both actuarial concepts are acknowledged by the Affordable care Act, but taken into account much differently.

Instead of separating folks who don't need certain services - such as prostate exams or maternity coverage - those features are foisted on all policy holders. That means men can subsidize gynecological exams for women, while women can help foot the bill for PSA screening for men.

That makes minimum coverage moot. The act sets standards for what health care policies must cover.

"Substandard" usually means something is defective or unsound. For example, substandard housing could be unsafe if building codes aren't followed or wiring isn't installed according to electrical codes.

But "substandard" health care plans aren't necessarily unsafe for an individual; but they might not help subsidize coverage for others.

Want lower premiums? Opt for a bronze-level plan's 40/60 split on health care costs. This puts the risk on the individual, instead of sharing the risk among the those in the pool.

Policies meeting Affordable Care Act standards suck higher rates from those who can afford to pay more to help subsidize coverage for those who can't.